The 2026 Roth Catch-Up Rule: What High Earners Need to Know Right Now
If you're over 50, earn more than $150,000, and contribute to a 401(k), there's a new rule that just changed how your retirement savings work. And honestly, most people haven't heard about it yet.
Starting in 2026, a quiet provision from the SECURE 2.0 Act is going into effect that requires certain high earners to make their catch-up contributions differently. Let's break down what this means for you in plain English.
What's Actually Changing?
Here's the short version: If you earned more than $150,000 last year and you're 50 or older, any catch-up contributions you make to your 401(k), 403(b), or similar workplace retirement plan must now go into a Roth account instead of the traditional pre-tax account.
Let's define a few terms first:
- Catch-up contributions: Extra money people 50 and older can add to their retirement accounts beyond the normal limit. For 2026, that's an additional $8,000 on top of the regular $24,500 limit.
- Traditional (pre-tax) contributions: Money that goes in before taxes, reducing your taxable income now. You pay taxes later when you withdraw it in retirement.
- Roth contributions: Money that goes in after you've already paid taxes on it. The upside? Any growth is tax-free and comes out tax-free in retirement.
Why Does This Matter?
This is a bigger deal than it might sound like at first.
Previously, most high earners making catch-up contributions did so on a pre-tax basis. That gave them an immediate tax break. If you put in the full $8,000 catch-up contribution and you're in the 32% tax bracket, that was roughly a $2,560 tax savings right now.
With the new rule, you lose that immediate tax deduction. You'll pay taxes on that $8,000 now instead of later. For someone earning $200,000 who maxes out their catch-up contribution, this could mean an extra $2,000-$3,000 in taxes for 2026.
Who Does This Affect?
The rule applies to you if:
- You're 50 or older
- Your wages (specifically your FICA wages from the previous year) exceeded $150,000
- You want to make catch-up contributions to your workplace retirement plan
Important note: This only affects catch-up contributions (that extra $8,000). Your regular contributions up to $24,500 can still be traditional pre-tax if you want.
What If Your Plan Doesn't Offer a Roth Option?
Here's an unfortunate wrinkle: If your employer's 401(k) plan doesn't have a Roth contribution feature, you're completely blocked from making any catch-up contributions at all.
This is worth checking on right now. Contact your HR department or plan administrator to confirm your plan offers Roth contributions. If it doesn't, you might need to advocate for adding this feature, or you'll miss out on that extra $8,000 of annual savings.
What About the Ages 60-63 "Super Catch-Up"?
If you're between 60 and 63, you get an even bigger catch-up contribution allowance: $11,250 instead of $8,000. The same Roth rule applies to these contributions too if you're over the $150,000 threshold.
That means someone age 62 earning $175,000 could potentially contribute $35,750 total in 2026 ($24,500 regular + $11,250 catch-up), but that entire $11,250 catch-up portion must be Roth.
What You Should Do Now
1. Check your 2025 income. Look at your W-2 when it arrives in January. Did you earn more than $150,000 in FICA wages? If you're close to the threshold, this could affect you.
2. Confirm your plan has a Roth option. Seriously, do this today. If your plan doesn't offer Roth contributions, you need to know now so you can plan accordingly.
3. Run the numbers. Calculate what the extra tax bill will be if you make Roth catch-up contributions. Can you afford it? Does it fit into your overall tax strategy?
4. Adjust your contribution elections. If you've been automatically maxing out catch-up contributions, make sure your payroll elections reflect the new Roth requirement. Don't assume it will happen automatically.
5. Consider the bigger picture. This is a good time to evaluate your overall retirement tax strategy. How much do you have in traditional accounts versus Roth? What will your tax situation look like in retirement?
The Bottom Line
This rule change is forcing a decision that used to be optional. High earners can no longer choose to make pre-tax catch-up contributions—they must be Roth.
For some people, this is genuinely beneficial and creates valuable tax-free growth potential. For others, it's an unwelcome tax bill. The key is understanding how it applies to your specific situation and planning accordingly.
If you're affected by this rule and unsure whether it helps or hurts your long-term plan, now is the time to talk with a financial advisor. The rule is already in effect, and adjusting your strategy mid-year is always harder than starting the year with a solid plan.
